Mortgage lenders have warned that there may be a shortage of credit in the coming months, leading to many first time buyers unable to secure mortgages.

The Council of Mortgage lenders has said that government schemes to keep mortgage lending afloat end in 2014, leaving a funding gap of £300 billion.

Before all the economic problems of the last few months, the gap between what the banks took in savings versus what they lent out was covered my the wholesale market in mortgage debt. However when the world financial markets were hit in 2007, the UK government was forced to plug this gap with the special liquidity scheme and credit guaranteed scheme.

Once these schemes have expired, many experts believe that the wholesale mortgage market will not have returned to previous levels thus leaving a funding gap. This means that mortgage lenders are likely to not be able to offer mortgages to as many people and first time buyers are likely to be the ones who miss out.

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